Maersk to Install Scrubbers on Select Vessels Ahead of 2020

A.P. Moller-Maersk, the world's biggest container shipping group,
will add devices to reduce harmful exhaust emissions to some of
its ships ahead of new global fuel regulations starting in 2020.

To combat air pollution, the International Maritime Organization
(IMO), the United Nations' shipping agency, has set global
regulations to cap the sulphur content in marine fuels, known as
bunkers, at 0.5 percent down from 3.5 percent now.

Shipowners could meet the new regulations by installing
sulphur-stripping exhaust cleaning systems, known as scrubbers,
and continue to burn cheaper high-sulphur fuel oil (HSFO). The
companies could also comply by burning costlier low-sulphur fuels
such as marine gasoil, ultra-low-sulphur fuel oil or liquefied
natural gas (LNG).

"As part of the preparations we have decided to invest in new
scrubber technology on a limited number of vessels in our fleet
of around 750 container vessels," Niels-Henrik Lindegaard, head
of Maersk Oil Trading told Reuters in an email.

"Using scrubber technology is a small part of - and just one of
several elements in - our overall 2020 fuel sourcing strategy to
ensure compliance in time," he said.

A spate of recent scrubber installation orders led energy
researchers to revise their demand forecasts for high-sulphur
bunker fuel higher as the scrubbers will let the ships continue
to burn HSFO.

But, a switch to low-sulphur fuels is still widely seen as the
most practical form of compliance given the high investment and
operational costs associated with scrubbers and uncertainty
around future emissions regulations.

"While we will continue to explore how to best comply with the
2020 sulphur cap, we still believe the best solution remains with
compliant fuels from refineries on land," said Lindegaard.

In August, Maersk announced it had reached an agreement with
Royal Vopak, an independent tank storage operator, to launch a
0.5 percent sulphur fuel bunkering facility in Rotterdam.

The joint initiative with Vopak will meet about 20 percent of
Maersk's global demand for IMO 2020 compliant fuels "and we are
looking into more bunkering facilities like this," said
Lindegaard.

Maersk Oil Trading purchases marine fuel for its parent company
A.P. Moller-Maersk and is among the biggest bunker buyers in the
world.